EUR/CHF Outlook:
Bearish, as the rate is below its recent average and near recent lows, pressured by weaker Eurozone data.
Key drivers:
• Rate gap: The European Central Bank (ECB) keeps rates unchanged while facing easing inflation, contrasting with the Swiss National Bank (SNB) considering negative rates if the franc remains strong.
• Risk/commodities: Current oil prices above the average have not benefitted the euro due to unsupportive Eurozone data, limiting the euro's potential against the CHF.
• One macro factor: A sharp decline in German industrial production has raised concerns about the Eurozone's economic resilience, weighing on the euro.
Range:
The EUR/CHF is likely to drift lower within its recent range, given the bearish pressures.
What could change it:
• Upside risk: A surprising rebound in Eurozone economic indicators or a shift in ECB policy could boost the euro.
• Downside risk: Further disappointment in German economic data could push the euro lower against the franc.